Washington, D.C., March 3, 2023 – Today, Blockchain Association submitted a letter in response to the Office of Science and Technology Policy’s (“OSTP”) Request For Information (“RFI”) titled, “Request for Information; Digital Assets Research and Development.” The RFI solicited “public comments to help identify priorities for research and development related to digital assets” as part of the Biden administration’s effort to engage all federal regulatory agencies to further research and implement a comprehensive regulatory regime for the crypto economy. Blockchain Association offered the following assessment and recommendations.
- Public blockchains solve decades-long problems in the legacy finance and information technology industries by removing the main source of risk and abuse: intermediaries. Crypto networks are the solution to the overwhelming power that centralized financial and tech intermediaries have over our everyday lives. They not only allow individuals to own their own data and content, but they also allow them to possess digital goods and property.
- Reliance on peer-reviewed reports and impartial data is crucial for OSTP to maintain accuracy and integrity in its reporting. The Association appreciates the focus that the OSTP has dedicated to the issue of power consumption and emissions from certain consensus mechanisms and further appreciates the opportunity to comment on this issue as part of the RFI. However, to arrive at a mutual understanding of the issue, we respectfully request that the OSTP, as well as other federal regulatory agencies, consider peer-reviewed evidence, impartial academic research, and transparent industry data to support future initiatives.
- The advantages of a CBDC are unclear. CBDCs present major privacy concerns for users, including tracking purchases and gleaning intimate personal details of its users. Congress and other agencies considering the development and implementation of a CBDC should look to China’s program: a censored version of the internet, and financial networks, giving the government immense power over the lives of its citizens.
The Association acknowledges and appreciates the work of OSTP in soliciting important perspectives and information on crypto networks and digital assets. Understanding the nuances of decentralized networks and what sets blockchain apart from previous generations of computing technology is prerequisite to successful regulatory steps by Congress and government agencies. Any new technology requires fit-for-purpose regulations: the automobile requires a different set of rules than the horse drawn carriage; electric light bulbs need different standards than gas lanterns; and email presents a different framework for communication than snail mail. So too should we approach the regulation of digital assets with regulations that fit their unique characteristics. We believe there are several areas where good, sound progress can be made now.
Legislators ought to capitalize on the broad industry and bipartisan Congressional support for centralized stablecoin regulation. While there is widespread sentiment in Congress to address stablecoins, any new legislation should ensure the following: seek to promote the competitiveness of the U.S. and the dollar; regulation should protect the privacy, security, and confidentiality of individuals utilizing stablecoins, including allowing customers to opt out of sharing any information with third parties; and financial surveillance requirements under the Bank Secrecy Act should be modernized. Additionally, stablecoin issuers should be subject to operational requirements, including: disclosures regarding assets held in reserves backing the stablecoin; clear policies regarding creation and redemption of stablecoins; and routine audits or attestations by registered public accounting firms. Congress should also consider crafting tailored legislation to cover the regulation of spot markets.
We applaud the OSTP for the effort to gather information from expert and public sources as they continue to study the digital asset economy. It is imperative that regulators not implement reactionary measures to recent market events without understanding the broader implications for this evolving technology. It is vital to balance the desire to mitigate risk with the enormous opportunities stemming from American innovation. The Association implores Federal agencies and Congress to take the required time necessary to get regulations right.
About Blockchain Association: Blockchain Association is the collective voice of the cryptocurrency industry. Our members include the sector’s leading investors, companies, and projects, working together to support a future-forward, pro-innovation national policy and regulatory framework for the crypto economy. Find us at theblockchainassociation.org. Follow us @BlockchainAssn.